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I am privileged to share with you our Company’s performance during the year under review; and provide key insights of the shrimp aquaculture industry. I think it is pertinent to provide an appropriate context before I discuss our performance for the year gone by.
Towards the end of 1980s, the Government of India started promoting shrimp aquaculture in coastal areas.
The objective was to put to use brackish waterbodies and idle land of the vast coastal regions to generate rural employment; and earn foreign exchange by the export of shrimps. The initiative was a win-win proposition as the brackish water and coastal lands, which were not of much productive use became a source for foreign earnings and provided rural employment.
India’s shrimp aquaculture has already gained momentum with the introduction of P. Vannamei species of shrimp in 2009. The country has now emerged as one of the largest producers of shrimp in the world. A significant portion of shrimps cultivated in India is primarily exported to the US, followed by Europe, Japan and South East Asian countries.
A long coastline across West Bengal, Orissa, Andhra Pradesh, Tamil Nadu, Puducherry, Kerala, Karnataka, Goa, Maharashtra and Gujarat have major brackish waterbodies. Out of total potential of 11.90 lakh hectors of land available, shrimp culture is undertaken in only 1.53 lakh hectors. With low penetration of shrimp culture, a significant scope exists for farmers to adopt shrimp culture as their primary source of livelihood.
As a leading manufacturer of shrimp feed we have always maintained high quality and consistency; and our credentials among farmers have helped us strengthen reputation among farmers.
FY 2017-18 in retrospect
We reported an encouraging performance during the year. We registered a 29.7% growth in consolidated revenues from Rs.2,615.7 Crore in FY 2016-17 to Rs.3,392.9 Crore in FY 2017-18, owing to the growing scale of our business. Our EBITDA grew by 106.7% from Rs.353.7 Crore in FY 2016-17 to Rs.730.9 Crore in FY 2017-18. Our EBITDA margins stood at 21.5% in FY 2017-18 (13.5% in FY 2016-17).
Simultaneously, our PAT surged by 106.1% from Rs.226.3 Crore in FY 2016-17 to Rs.466.5 Crore in FY 2017-18. We focuseds on high-growth geographies with a robust portfolio of products to drive profitable growth. We rewarded our shareholder with a proposed dividend of Rs.6/- per share of face value Rs.1/-each.
Our feeds business grew by 26.20% from Rs.2,230.8 Crore in FY 2016-17 to Rs.2,815.3 Crore in FY 2017-18. Our PBT increased by 112% from Rs.296.4 Crore in FY 2016-17 to Rs.629.2 Crore in FY 2017-18. Moreover, our shrimp processing and export business grew by 51.33% from Rs.384.1 Crore in FY 2016-17 to Rs.581.2 Crore in FY 2017-18. Our PBT increased by 75.40% from Rs.42.1 Crore in FY 2016 -17 to Rs.73.8 Crore in FY 2017-18.
Our market leadership is based on the quality of our products and the technical assistance we provide to our farmers. Farmers prefer our feed because they get best-in-class Feed Conversion Ratio (FCR) ensuring higher yield. Our team of more that 250 technical team of graduates in fisheries science visit shrimp culture ponds of farmers and advise them during the progress of the culture. In addition to this our Technical Assistance After Sales Service (TASS), who are all graduates in fisheries science with practical training in all aspects of shrimp culture also visit shrimp culture ponds and educate farmers on appropriate practices to get the best harvest.
Our new shrimp feed plant at Bandapuram, Andhra Pradesh commenced commercial production in August 2016. As the demand for our feed products are growing year after year, we have further expanded the capacity by 1,75,000 MT per annum at the existing feed plant at Bandapuram and operations of expanded capacity started in March 2018. Post expansion, the total feed production capacity of all the units put together is 600,000 MT per annum in FY 2018-19.
We commissioned our new state-of-the-art shrimp processing plant (Unit-2) established at Yerravaram, Andhra Pradesh with 15,000 TPA capacity in subsidiary AFFPL and started commercial production and exports from August 2017. This plant is equipped with the facility to process cooked high-value products, in addition to traditional block freezing of raw shrimps. Now we have cumulative capacity of 22,000 TPA for shrimp processing.
We have planned to set up shrimp hatchery of 400 million capacity; and commercial production is planned by 2019. This will be implemented in phased manner with 200 million in the first phase. This project is totally funded from internal accruals. The commercial production is scheduled in early 2019.
We cannot afford to be complacent, we have many milestones to cross. Our future priorities comprise the following:
- Increase market share of shrimp feed sales
- Explore the possibility of exporting feed to other countries
- Expand to other feeds like fish feed and other feeds
- Increase shrimp exports with focus on high value-added products and ready to eat
- Operationalise the first phase of shrimp hatchery with 200 million capacity
At Avanti Feeds, we will continue to invest in our capabilities to capture a larger market share and create value on a sustainable basis for all stakeholders. On behalf of the Board of Directors, I express my gratitude to our shareholders, customers, business associates and employees for their continued trust and support.
Mr. ALluri Indra Kumar
Chairman and Managing Director